Economic growth in developing Asia may be pushed down to 5.7 percent in 2016 and 2017 due to the weak recovery in major industrial economies as well as softer growth prospects for China, a new report from the Asian Development Bank (ADB) said.
The Asian Development Outlook (ADO) 2016 report said that China’s economic growth is expected to moderate to 6.5 percent in 2016 and 6.3 percent in 2017. The country’s economic growth in 2015 was 6.9 percent.
“PRC’s growth moderation and uneven global recovery are weighing down overall growth in Asia,” ADB cited its Chief Economist Shang-Jin Wei as saying. “Despite these pressures, the region will continue to contribute over 60% of total global growth.”
He suggests for the countries in Asia to continuously implement reforms that enhance productivity, invest in under-supplied infrastructure and have sound macroeconomic management. These steps will shield them from global instability as well as increase their potential for growth.
In 2015, Asia’s Gross Domestic Product (GDP) growth was 5.9 percent.
Among the sub-regions, South Asia is expected to post the most rapid growth, with 6.9 percent in 2016 and 7.3 percent in 2017. Last year, it grew by 7 percent.
As for India, its economy is seen as expanding by 7.4 percent in 2016, and 7.8 percent in 2017. In 2015, India’s economy grew 7.6 percent. Meanwhile, Southeast Asia's economy is expected to grow stronger at 4.5 percent in 2016 and 4.8 percent in 2017. It went up from 4.4 percent in 2015.
“Modest recovery in Southeast Asia and sustained growth in India will partly offset continued moderation in the People’s Republic of China and the associated spillover into neighboring economies,” the ADO 2016 said.
The report also noted that the aggregate growth in the US, Japan and the euro area will stay at 1.8 percent in 2016 and move up to 1.9 percent in 2017.
The ADO is an annual report that gives a comprehensive analysis of economic performance in the previous year. It also provides two-year forecasts for 45 Asian economies as well as the Pacific that make up developing Asia.